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What is the fate of Canada-based pension fund that invested in FTX?

Canada-based Teachers

TL;DR Breakdown

  • Teachers Pension Plan invested heavily in the FTX.com crypto exchange platform. 
  • Binance CEO cited the Liquidity crunch as a reason for the potential acquisition of FTX.
  • No comments have been made from the Teachers Pension Fund, FTX, and Binance.

The recent happenings with FTX have affected the crypto and investment space including the Canada-based Teachers Pension Plan. The possible acquisition of Sam Bankman’s FTX.com crypto exchange platform following a cited liquidity crunch has placed several other firms in jeopardy. Among the potentially hit investment firms is the Teachers Pension Plan reportedly invested in FTX.com a year ago, with a valuation of $25 billion. 

Following the recent Tweets by Binance‘s Chief Executive Officer, the Binance exchange, the largest crypto exchange platform today is willing to purchase FTX.com, which is ranked the second largest crypto exchange. The FTX.com platform’s liquidity crunch is a clear indication that the Canada-based Teacher’s Pension Plan’s investment in the crypto exchange platform may have faced a terrible hit. 

The Tuesday news of FTX.com selling itself to the Binance exchange has shaken the crypto market. Several cryptocurrency prices plummeted since then with the FTT token taking the greatest hit. FTX’s native token, FTT, lost nearly 75% of its value to trade at an average price of $5.27 on Tuesday. 

Popular crypto coins like Bitcoin also got hit, as many FTX users were rushing to sell off their coins from the affected crypto exchange platform. The Bahamas-based cryptocurrency exchange platform, FTX appeared to have over-leveraged which led to a significant liquidity crunch that exposed users to high risk. The Binance CEO stated that their move to sign a non-binding LOI with FTX was a request from Sam Bankaman’s firm to assist in protecting users from high impact.

SBF has been famously known as the crypto White Knight, with his bailouts that have been of significant help to several crypto projects. Despite the goodwill, the firm faced a serious financial crisis that prompted Binance CEO, Changpeng Zhao to step in and help. 

Canada-based Teacher’s Pension Plan involvement with FTX

The Canada-based Teacher’s pension fund bought its first large stake in FTX on October 2021 which was the beginning of the $420 million funding round. Despite having no official mention of the total amount invested in the Bahamas-based crypto exchange, it certainly was a significant amount that could affect the pension funds’ operations should it lose its investment. 

The third largest pension fund in Canada was estimated to have approximately $245 billion in total assets. Three percent of the firm’s total investment portfolio was dedicated to high-risk investments with represented approximately $8.2 billion. 

The pension plan serves more than 333,000 teachers, both active and retired. Their diversified portfolio ensures a positive return on investment in the previous year when many investment banks recorded losses to the tune of -14.7%. According to Canada-based Teachers’ Chief Executive Jo Taylor, the pension plan’s diversification to invest in FTX was one of the lowest investment risks made, as many people traded on the cryptocurrency exchange platform. 

As the current developments unfold, the Canada-based Teacher’s pension plan is expected to assure its members of the state of their investments amid rumours of a potentially significant loss due to FTX. The current crypto situation is slippery with several uncertainties. And many chief executives have declined to comment on the current status. 

Collins J. Okoth

Collins J. Okoth

Collins is a skilled Crypto, Blockchain, and Finance Analyst with years of experience writing about blockchain technology, cryptocurrencies, and finance. His background in Actuarial Science and Finance gives his articles authority, in-depth, and real value to readers.

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